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Brexit worries leave PCL’s private rental market in limbo

3rd January 2018

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Uncertainties over Brexit will continue to hit property investor sentiment in prime central London (PCL), according to a leading letting agent.

While buy-to-let remains popular with a number of private landlords across the UK, many investors in prime central London, where rental yields are among the lowest in the country, have put the brakes on acquiring more properties and will continue to do so until there is greater clarity on how Brexit will affect the market.

“Until such time as there are foreseeable consequences of Brexit, the market will remain in limbo,” said Lynsey Schipper, head of letting at Lurot Brand, which has offices in Hyde Park, South Kensington and Notting Hill.

“Tenants that have to move will move, for the same reasons people have always been forced to move – births, deaths and marriages,” she added. “Everyone else, particularly those in a more stable position due either to their own independence or the nature of the business they work in, will likely renew where they are and continue playing the waiting game.”

Schipper believes that many tenants are actively “bargain hunting”, especially if they are currently paying above market rate in rent.

She continued: “Tenants currently renewing [their tenancy] will inevitably continue to try and negotiate the rent down; and avoid where possible a lengthy fixed term commitment, realising the pressure is on for PCL landlords.”

Whether this is accepted by buy-to-let landlords or not appears to be largely dependent on the landlords’ personal politics, according to Schipper

She continued: “Landlords unfazed by Brexit and positive about the future of London are less likely to accept a significant drop in rent, even if they would prefer to avoid remarketing the property, it is not a case of ‘at any cost.

“For the many landlords that were very much in the ‘remain’ camp, the outlook is of course far less optimistic, those really despairing are pursuing the possibility of selling up.

“Sales market appraisals for long term landlords have been rife [in 2017]; also due to the loss of tax breaks for landlords.”